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Insurers back light-touch CTP changes for driverless cars

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Insurers are mostly favouring minimum changes to compulsory third party (CTP) schemes in preparation for driverless cars, while WA’s state-owned authority has taken a different stance and says new solutions are needed.

The Insurance Council of Australia (ICA) supports minimal adjustments in the first instance, with further changes to depend on experience as CTP claims are assessed after collisions involving automated vehicles.

“Changes should only be made if the current legal framework and mechanisms for recovery fail to respond to the challenges,” it says in a submission to the National Transport Commission (NTC).

ICA backs an option in an NTC discussion paper that would see existing schemes amended so injured people would have access to compensation and benefits regardless of whether an injury was caused by a human driver or an automated one.

“If a light-touch approach is adopted there will be greater certainty, efficiency and transparency for road users as their path to recovering compensation for an injury will remain largely unchanged,” the council says.

ICA rejects a national reinsurance pool that could be responsible for a malfunction, but says there should be a locally based automated driving system entity that the insurer has a right of recovery against, and which in turn could seek recovery from other parties.

“What is important is that litigation and recovery from negligent parties does not constitute an undue burden on a claimant; it should continue to happen behind the scenes for the consumer,” it says.

The Insurance Commission of WA rejects extending existing schemes, which it says were not designed to cover vehicle manufacturer negligence and product liability risks.

“The advent of automated vehicles presents a new set of risks that require new products and solutions to manage them,” it says.

The commission “favours the principle that vehicle manufacturers and the companies that introduce technology on Australian roads should be responsible for the performance of the technology and the cost of personal injury if those products fail”.

The NTC called for feedback on six options, including “option three” supported by ICA, and will make recommendations to a state and federal transport ministers meeting in May.

Separate submissions by ICA members including QBE, Suncorp, Allianz and IAG also favoured the third option in the first instance.

IAG says in the longer-term there is scope to move to “option five”, which involves agreeing national benchmarks for scope and coverage, while allowing flexibility for individual jurisdictions.

“When there is more certainty around automated vehicle performance on our roads, states and territories should collaborate to establish national benchmarks for supporting injured road users across Australia,” it says.